A UK-born entrepreneurial hub is attempting to kickstart equity crowdfunding into life in India.
TechHub – a community and workspace for technology startups – is taking an active role in lobbying the Indian government and regulator (SEBI) to permit retail involvement in the equity crowdfunding space. TechHub now has an office in Bangalore, thanks to support from the UK government, and is tasked with creating 1,000 Indian startups over the next half decade. Equity crowdfunding is being pitched as the answer to that challenge.
Stewart Noakes, Co-Founder of TechHub Bangalore, spoke to BusinessLine:
“In India investors are being very cautious and hence putting money in all the big and proven businesses such as Flipkart and Snapdeal. They are looking at scale and not innovation. We need to change that early stage funding scenario in India. Equity crowd-funding is an excellent tool for start-ups.”
But are there any platforms within India that are vying to deliver an equity crowdfunding product to retail investors? LetsVenture stands out as a potential champion of the cause. The site already offers equity investment opportunities in Indian startups to Angel and institutional investors. This high net worth version of crowdfunding was legalized in India earlier this year. Two rewards-based outfits – Catapooolt and Indiegogo – also have a presence in the country and might look to broaden their range of products if retail capital were to become readily accessible.
Satish Kataria, Founder of Catapooolt, explained that the main inhibitor to the growth of crowdfunding in India is understanding:
“In western markets, crowd-funding has grown by leaps and bounds on account of larger risk appetite and number of potential seed investors and also a wide based consumer attitude which likes to ‘discover and participate’ in new upcoming creative and start-up projects. Such an attitude in Indian market will still take some time.
One could say that as a new concept life journey – crowd-funding in India is today where e-commerce was four years back.”
TechHub’s role in all this is presumably to convey a measure of the positive impact that equity crowdfunding has had on the UK economy – where around £75m has been channeled into British startups (according to AltFi Data). The entrepreneurial hub’s involvement also reflects the UK’s position as a global thought leader in the alternative space. Indeed, if SEBI permits full-blown, nationwide equity crowdfunding, retail investors will only be allowed to invest 10 per cent of their investible assets. Sound familiar?
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.